Excise For Manufacturer

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Excise For Manufacturer

  1. 1. Excise for Manufacturer Select the required Option Introduction to Central Excise Excise for Manufacturer in Tally.ERP
  2. 2. Introduction to Central Excise
  3. 3. Central Excise <ul><li>Central Excise is an Indirect Tax </li></ul><ul><li>Levied by Central Government As per Central Excise Act, 1944 </li></ul>
  4. 4. Excise duty is Applicable on?
  5. 5. Goods <ul><li>What is GOODS ?? </li></ul><ul><li>The article which is movable and marketable is called as GOODS </li></ul>
  6. 6. The Goods which are Excisable <ul><li>What is Excisable Goods ?? </li></ul><ul><li>Articles which are included in Central Excise Tariff Act, 1985 (CETA) are called as ‘Excisable Goods’ </li></ul>CETA 1985 Must be mentioned in Central Excise Tariff Act
  7. 7. Manufactured / Produced in India* <ul><li>Article which are Produced Or must be Manufactured – New & identifiable product known in the market must emerge </li></ul>Not Amounts to Manufacture Amounts to Manufacture
  8. 8. What is Manufacturing? …. <ul><li>Deemed Manufacturing </li></ul><ul><li>Packing, Labeling, drawing, Mixing, Diluting etc </li></ul>
  9. 9. So… Excise duty is Applicable on? <ul><li>GOODS which are movable and marketable </li></ul><ul><li>Goods which are mentioned in “ Central Excise Tariff Act” </li></ul><ul><li>Goods which are Manufactured in India </li></ul>
  10. 10. How Excise Duty is calculated ? <ul><li>Excise Rate : Excise Rate is a Percentage / Value to be charged as Duty on Assessable Value / Quantity </li></ul><ul><li>Assessable Value / Quantity : Assessable Value / Quantity is determined based on Valuation Methods provided by Central Excise Department </li></ul>
  11. 11. Rates specified as per “Classification” <ul><li>Why Classification ?? </li></ul><ul><li>All goods cannot carry the same rate of duty </li></ul><ul><li>It is also not possible to identify all goods individually </li></ul><ul><li>It is necessary to create Group & Sub-Group to decide a rate of duty on each group & sub-group this is called “Classification” </li></ul>CETA 1985 Central Excise Tariff
  12. 12. “ Classification / Tariff….” <ul><li>World Customs organisation (WCO) felt the need to have universal standard system of classification of Goods. </li></ul><ul><li>HSN (Harmonised System of Nomenclature) was introduced </li></ul><ul><li>Indian Central Excise Tariff (CETA) is based on HSN (w.e.f 1986). </li></ul>
  13. 13. Valuation of Goods (Assessable Value) <ul><li>Based on Transaction Value (Valorem) (Section 4) </li></ul><ul><li>Based on Quantity (Quantum) </li></ul><ul><li>Based on MRP ( Maximum Retail Price) (Section 4A) </li></ul><ul><li>Tariff Value (Section 3(2)) </li></ul><ul><li>Compounded Levy Schemes (Currently not supported in Tally.ERP 9) </li></ul>
  14. 14. When we have to pay Excise duty?
  15. 15. On removal <ul><li>The taxable event under the Central Excise law is ‘Manufacture ’ </li></ul><ul><li>The liability of Central Excise duty arises as soon as the goods are manufactured However collected on removal under Rule 11 invoice </li></ul>
  16. 16. Removal under Rule 11 Invoice <ul><li>Excisable goods shall be removed from a factory or a warehouse with an invoice signed by Proprietor or authorized person. </li></ul><ul><li>Name and Address of Dealer </li></ul><ul><li>Division name and address </li></ul><ul><li>Registration number of Dealer </li></ul><ul><li>Name of Consignee </li></ul><ul><li>Description of goods </li></ul><ul><li>Classification of Goods </li></ul><ul><li>Time and date of removal </li></ul><ul><li>Rate of Duty </li></ul><ul><li>Quantity of Goods </li></ul><ul><li>Value of goods </li></ul><ul><li>Duty payable </li></ul><ul><li>Mode of transport </li></ul><ul><li>Vehicle Number </li></ul><ul><li>Few requirements of Rule 11 </li></ul><ul><li>Serial Number of Invoice – Could be pre printed or Computer generated at the time of issue of the invoice. CBEC Circular no. 482/48/99-CX dt. 25.8.99 </li></ul>
  17. 17. CENVAT Credit (ModVAT) <ul><li>Objective was to avoid the cascading effect of multi point levy which skews the price of a product </li></ul><ul><li>Duty paid is allowed as credit on Inputs and Capital goods purchased from Manufacturers , Registered dealers </li></ul><ul><li>This credit is allowed to be used for Discharge of Duty Payable </li></ul>
  18. 18. Type of Assessee <ul><li>SSI – Small Scale Industry </li></ul><ul><ul><li>Total Value of Clearance is less than 4 Crores in previous financial year. </li></ul></ul><ul><li>Regular </li></ul><ul><ul><li>Total Value of Clearance is more than 4 Crores in previous financial year. </li></ul></ul><ul><li>LTU </li></ul><ul><ul><li>Excise duty or Service tax paid more than 5 Crores in a financial year </li></ul></ul>
  19. 19. Q & A
  20. 20. Excise for Manufacturer in Tally.ERP
  21. 21. Steps to be followed for Excise for Manufacturer in Tally.ERP <ul><li>Register Excise Unit / Factory </li></ul><ul><li>Create Tariff / HSN </li></ul><ul><li>Create Raw Material & Finished Goods </li></ul><ul><li>Create Voucher Types for Excise purpose </li></ul><ul><li>Create Supplier / Customer Ledgers </li></ul><ul><li>Create Additional Expense Ledgers </li></ul><ul><li>Create Excise Duty Ledgers </li></ul><ul><li>Transactions </li></ul><ul><ul><li>Purchase Raw Materials </li></ul></ul><ul><ul><li>Manufacture Finished Goods </li></ul></ul><ul><ul><li>Removal of Finished Goods </li></ul></ul><ul><ul><li>Removal of Finished Goods </li></ul></ul><ul><ul><li>Utilising CENVAT Credit against Payable Excise Duty </li></ul></ul><ul><ul><li>Payment of Excise Duty (G.A.R. 7) </li></ul></ul>
  22. 22. Register Excise Unit / Factory <ul><li>Go to F11 (Features)  Statutory & Taxation (F3) </li></ul><ul><li>Enable Excise and provide Excise Unit Details </li></ul><ul><li>Here you will be entering the Registration details of the Unit / Factory </li></ul><ul><li>Excise Invoice Book : It’s a Numbering Series to be used in Rule 11 </li></ul><ul><li>There should be at least one Excise Invoice Book for each Excise Unit </li></ul>Step 1
  23. 23. Create Tariff / HSN <ul><li>Go to Inventory Info.  Tariff Classification  Create </li></ul><ul><li>Create Tariff Classification required </li></ul><ul><li>Here you will be creating Tariff / HSN which are applicable for the organization </li></ul><ul><li>Note : You can create Tariff / HSN only for Excise only for VAT or for Both </li></ul>Step 2
  24. 24. Create Raw Material & Finished Goods <ul><li>Go to Inventory Info.  Stock Item  Create </li></ul><ul><li>Create Stock Items (Raw Material / Finished Goods) as required </li></ul><ul><li>Here you will be creating Raw Materials & Finished Goods and define the Duty details for each of the stock item </li></ul><ul><li>Select Tariff Classification applicable for the item </li></ul><ul><li>Reporting UOM : Reporting UOM (Unit of Measure) is prescribed unit by Central Excise. Which will be used in all Excise Reports </li></ul><ul><li>Valuation Type : Select valuation type applicable for the item </li></ul><ul><li>List of Excise Duty Classifications : Is the exhaustive list of all duties prescribed by Central Excise </li></ul><ul><li>Stock Item Type : Select the appropriate item type or else select Others </li></ul>Step 3
  25. 25. Create Voucher Types for Excise purpose <ul><li>Go to Accounts Info.  Voucher Type  Create </li></ul><ul><li>Create Voucher Types (Purchase, Purchase Returns (Debit Note), Manufacturing Journal, Sales, Journal (voucher class creation) ) for Excise purpose </li></ul><ul><li>Here you will be creating Voucher Types required for Excise process </li></ul><ul><li>Create voucher types under the appropriate Type of Voucher </li></ul><ul><li>Set YES for Excise and select Excise Unit </li></ul><ul><li>Note : For each Excise Unit you have to create separate set for voucher types </li></ul>Step 4
  26. 26. Create Supplier / Customer Ledgers <ul><li>Go to Accounts Info.  Ledger  Create </li></ul><ul><li>Create Suppliers / Customer ledger and specify their Excise details </li></ul><ul><li>Here you will be creating Supplier / Customer Ledger and specify their Excise Details which will be used on invoices </li></ul><ul><li>Under Set / Alter Excise Details provide Excise Details of the Supplier / Customer. </li></ul><ul><li>Nature of Removal : This is to define the transaction type whether its Default, Exempt or Export transaction. </li></ul><ul><li>Note : Selecting Exempt or Export type signifies that there will be no Excise Duty calculation in the transaction </li></ul>Step 5
  27. 27. Create Additional Expense Ledgers <ul><li>Go to Accounts Info.  Ledger  Create </li></ul><ul><li>Create Additional Expense Ledgers (Packing Charges, Loading Unloading Charges, Insurance etc.) and specify method of apportioning for calculation of Assessable value </li></ul><ul><li>Here you will be creating Additional Expense Ledger and specify their Excise Details which get printed on invoices </li></ul><ul><li>Create additional expenses under indirect / direct expenses </li></ul><ul><li>Use for Assessable Value Calculation : Setting this option will apportion the expense value for Assessable value calculation. Based on option selected it will apportion (Based on Quantity or Value) </li></ul>Step 6
  28. 28. Create Excise Duty Ledgers <ul><li>Go to Accounts Info.  Ledger  Create </li></ul><ul><li>Create Excise Duty Ledgers such as Basic Excise Duty, Education Cess, Secondary & Higher Education Cess etc. </li></ul><ul><li>Here you will be creating Excise Duty Ledgers and give Accounting Code and select appropriate Type of Duty and Duty Head </li></ul><ul><li>Type of Duty / Tax : Select Excise </li></ul><ul><li>Excise Accounting Code : Give the Duty Accounting code. This will be used in GAR 7 challan </li></ul><ul><li>Duty Head : Select appropriate Duty Head as applicable </li></ul><ul><li>Percentage of Calculation : Give applicable percentage for the Duty </li></ul><ul><li>Method of Calculation : Appropriate method will be shown depend upon Duty Head </li></ul>Step 7
  29. 29. Purchase Raw Materials <ul><li>Go to Accounting vouchers  F9  Select Excise Purchase </li></ul><ul><li>Here you will be passing voucher for Purchasing Raw Materials </li></ul><ul><li>In Purchase there are TWO ways you can avail CENVAT Credit </li></ul><ul><li>Full Credit Availed : If Excise Duty selected in Purchase voucher is of CENVAT type </li></ul><ul><li>NO Credit Availed : If Excise Duty selected in Purchase voucher is of Excise type </li></ul>Step 8
  30. 30. Manufacture Finished Goods <ul><li>Go to Inventory Vouchers  Alt + F7  Select Manufacturing Journal </li></ul><ul><li>Here you will be passing voucher for Manufacturing Finished Goods </li></ul><ul><li>With this entry you will be consuming Raw Material to produce Finished Goods </li></ul>Step 8….
  31. 31. Removal of Finished Goods <ul><li>Go to Accounting Vouchers  F8  Select Excise Sales </li></ul><ul><li>Here you will be passing voucher for Removal of Finished Goods </li></ul><ul><li>Excise Book Name & No. : This is Excise Invoice Book and No. to be printed on Rule 11 invoice </li></ul><ul><li>Nature of Removal : (Default) General removal type (Exempt) For Exempt Removal (Export) For the purpose of Export removal </li></ul><ul><li>Show Statutory Details : This is to check the Duty / Tax calculation of the invoice </li></ul><ul><li>Note : Selecting Exempt or Export Nature of Removal will not calculate Excise duties </li></ul>Step 8….
  32. 32. Utilising CENVAT Credit against Payable Excise Duty <ul><li>Go to Accounting Vouchers  F7  Select Journal and Voucher Class created for Excise adjustment </li></ul><ul><li>Here you will be passing voucher for adjusting CENVAT Credit with Excise Duty payable </li></ul><ul><li>Excise Adjustment Method : We have to select the appropriate Excise Adjustments type (Adjustment of CENVAT Credit) used for adjusting CENVAT Credit with Payable Excise Duty </li></ul>Step 8….
  33. 33. Payment of Excise Duty (G.A.R. 7) <ul><li>Go to Accounting Vouchers  F5  Select Payment </li></ul><ul><li>Here you will be passing voucher for Payment of Excise Duty </li></ul><ul><li>Provide Details : We have to provide (Period details) for which period we are paying duty (Challan and other details) which will get printed in GAR 7 challan </li></ul>Step 8….
  34. 34. Q & A
  35. 35. Coming in next Release 1.x … <ul><li>Job work in & out </li></ul><ul><li>Captive consumption </li></ul><ul><li>Removal as such </li></ul><ul><li>Repairs and renewals </li></ul><ul><li>Export CT2 & CT3 </li></ul><ul><li>Custom duty handling </li></ul><ul><li>Bonded warehouse and branch transfer </li></ul>
  36. 36. Thank You

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